Opportunity Cost and Public Decision-making Juliet Elu, Ph.D. Department of Economics Morehouse College Morehouse College Admitted Students Day 2017

Public Policy and Opportunity Cost Events in Fort Worth Texas and other incidents where issues of local policing tactics have been displayed in the news media as questionable have played a large role in indictment, policy and procedures regarding police brutality. Some people even argue law enforcement agents are protected by a blue wall. Local officers of the court are now faced with the question: What is the opportunity cost of indicting and convicting a police officer in a high profile case? How can we use the PPF to analyze this trade off? Do you feel indicting police in high profile cases are worth the opportunity cost?

Opportunity Cost The Opportunity Cost of a decision is the value of the next best alternative that must be given up because of that decision. To illustrate opportunity costs in economics we use a Production Possibilities Frontier (PPF). A PPF is a graph that shows the optimal quantities that can be produced from two goods given all available resources and the current state of technology. The main function of a PPF is to illustrate trade-offs.

An Example of Opportunity Costs Using a PPF Earning all A’s Recreational Activities

An Example of Opportunity Costs Using a PPF Earning all A’s Recreational Activities

An Example of Opportunity Costs Using a PPF Earning all A’s Recreational Activities

An Example of Laws Governing Police Autonomy Incidence of Crime

Discussion: Given that law enforcement officials can become discouraged by decreased autonomy, or “power hungry” from increased autonomy, what would you suggest to make sure law enforcement officials have more appropriate incentives while on duty? If you were a judge or a state attorney how would you approach this issue?

What is Economics? Economics is the study of how individuals, businesses and governments allocate resources to deal with the unavoidable problem of scarcity. Microeconomics studies decisions made by households, firms as well as state and local governments to optimize consumption, output and social welfare, respectively. Macroeconomics studies decisions made by fiscal and monetary authorities regarding inflation, employment and output.

Subfields in Economics Include: Mathematical and Quantitative Methods Econometrics Game Theory and Bargaining Theory Experimental Economics Microeconomics Macroeconomics and Monetary Economics The Business Cycle Money and Interest Rates International Economics and International Trade Finance and Financial Economics Public Economics, Taxation, and Government Spending Health, Education, and Welfare Labor and Demographic Economics Law and Economics Industrial Organization Business Administration and Business Economics; Marketing; Accounting

Jobs in Economics Market Research Analyst Economic Consultant Compensation and Benefits Manager Actuary Credit Analyst Financial Analyst Policy Analyst Lawyer Management Consultant Business Reporter Public Sector